Allowed

Hyderabad Chemicals Umited (Hcl) v. -

Telangana HC28 Oct 2014CP/122/2014

Case brief

AI extract

What is this about?

The Court sanctioned a proposed scheme of arrangement (demerger) between Hyderabad Chemicals Limited and Vibrant Greentech Limited under Sections 391 and 394 of the Companies Act, 1956, subject to specific conditions regarding accounting standards, tax liabilities, and compliance with name change requirements.

What did the court decide?

Sanction of the proposed scheme of arrangement (demerger) between the two companies subject to four specific conditions.

Hyderabad Chemicals Umited (Hcl) Vs - — Company and Corporate | Telangana HC (2014)

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HON’BLE SRI JUSTICE A.RAJASHEKER REDDY COMPANY PETITION Nos.122 and 123 of 2014

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COMMON ORDER:

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Company Petition No.122 of 2014 is filed by Hyderabad Chemicals Limited under Sections 391 and 394 of the Companies Act, 1956 (for short, ‘the Act’) seeking approval of the proposed Scheme of Arrangement (Demerger) between Hyderabad Chemicals Limited (for short, ‘Demerged Company’) and Vibrant Greentech Limited (for short, ‘Resulting Company’).

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Company Petition No.123 of 2014 is filed by the Resulting Company for approval of the proposed scheme of demerger.

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In Company Petition No.122 of 2014, the Demerged Company has stated as under:

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It was incorporated under the provisions of the Act on 30.01.1954; that its Corporate Identity Number is U24230TG1954PLC000736; that its registered office is situated at the premises bearing No.4-3-377/1, Bank Street, Koti, Hyderabad; that its main objects are to carry on business of chemicals, druggists, oilmen standard drugs, hospital requisites and surgical requirements, importers and manufacturers and dealers in pharmaceutical, medical, chemical industrial and other preparations and articles, compounds, cement oils, paints and varnishes, drugs, dyeware, makers of and dealers in proprietary articles of all kinds and of electrical chemical, photographical, surgical and scientific apparatus and materials and to buy, sell, manufacture, refine, manipulate, import, export and deal in all substances, apparatus and things capable of being used in any such business as aforesaid, or required by customers or persons having dealing with company, either by wholesaler or retail; that its authorised share capital is Rs.1 crore divided into Rs.10 lakhs equity shares of Rs.10/- each; that its issued, subscribed and paidshare capital, as on 31.12.2013 is Rs.27,99,000/- divided into Rs.2,77,900/each; that it has two distinct businesses, viz., pesticides division and power division; that the scheme provides for demerger of its pesticide division into

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Resulting Company and consequent issue of equity shares by the Resulting Company to the shareholders of the Demerged Company pursuant to clause 5.1 of the scheme; that the Board of Directors, in the meeting held on 20.01.2014, has approved the proposed scheme of demerger subject to the sanction of this Court; that the appointed date is fixed as 01.08.2014.

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The Demerged Company has filed Company Application No.412 of 2014 and this Court, vide orders dated 19.03.2014, dispensed with the requirement of convening the meetings of shareholders, secured creditors and appointed Chairperson for convening the meeting of unsecured creditors of the Demerged Company; that in pursuance of the same, the date of meeting of the unsecured creditors of the Demerged Company was published pursuant to the order of this Court on 08.04.2014 in Business Standard and Andhra Bhoomi, Hyderabad editions and corrigendum was published on 09.04.2014 in the same newspapers. The Chairperson of the meeting also filed an affidavit on 24.04.2014 stating that the Demerged Company has posted the notice of the meeting to the unsecured creditors of the Demerged Company and also published the date of meeting of the unsecured creditors. As directed by this Court, vide its order dated 19.03.2014, the Demerged Company has conducted the meeting of the unsecured creditors on 05.05.2014. The Chairperson appointed by this Court, vide its order dated 19.03.2014, filed report dated 12.05.2014, stating that the meeting of the unsecured creditors of the Demerged Company was attended by 21 unsecured creditors in person to whom the Demerged Company owes an amount of Rs.2,49,22,127/- and 55 unsecured creditors through proxies to whom the Demerged Company owes an amount of Rs.33,89,75,154/aggregating 76 unsecured creditors to whom the Demerged Company owes an amount of Rs.36,38,97,281/- and all the unsecured creditors present in person and through proxies voted in favour of the proposed resolution. The Demerged Company filed the present Company Petition No.122 of 2014 on 07.06.2014 seeking direction for publication of date of final hearing of the petition and also direction to the Regional Director for submitting his report on

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the affairs of the Demerged Company and sanction of the Scheme of Arrangement (Demerger). The Demerged Company published the date of final hearing of the petition in two newspapers, viz., the Business Standard English daily and Andhra Bhoomi Telugu daily in Hyderabad editions on 19.07.2014 and counsel for the Demerged Company submitted a memo to this effect on 30.07.2014. The Regional Director made a combined report on 25.08.2014 on the affairs of the Demerged Company and the Resulting Company and the same was filed before this Court. The Demerged Company also filed consent given by its secured creditors to the Scheme of Arrangement (Demerger) and consent given by the Department of Industries and Commerce, Government of Telangana to the Scheme of Arrangement (Demerger).

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In Company Petition No.123 of 2014, the Resulting Company has stated as under:

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It was incorporated on 01.01.2014; that it commenced its business operations on 01.01.2014; that its Corporate Identity Number is U24100TG2013PLCO91502; that its registered office is situated at premises bearing No.A-24/25, Assisted Private Industrial Estate, Balanagar, Hyderabad; that its main objects are to carry on the business of manufactures, producers and dealers in pesticides, insecticides, redenticides, fungicides, weedicides, nutrients, dips, sprays, vermifuges medicines and remedies for all kinds of agricultural, fruit growing or other purposes or as remedies for agricultural crops and produce and to manufacture, produce, refine, process, formulate, buy, sell, export, import or otherwise deal in all classes and kinds of chemicals including without limiting the generality of the foregoing, laboratory and scientific chemicals, chemical of any nature, used or capable of being used in the pharmaceutical industry, agricultural chemicals, industrial chemicals, or in mixtures, derivatives and compounds thereof; that it is authorized share capital of Rs.1 crore divided into Rs.10 lakhs equity shares of Rs.10/- each; that by resolution, dated 20.01.2014, its Board of Directors has approved the proposed scheme of demerger.

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The Resulting Company has filed Company Application No.413 of 2014 and this Court, vide orders dated 19.03.2014, dispensed with the requirement of convening the meeting of shareholders of the Resulting Company. This Court, vide orders dated 18.06.2014, issued directions for publication of date of final hearing of the petition and also direction to the Regional Director for submitting his report on the affairs of the Demerged Company. As per the directions of this Court, the Demerged Company published the date of final hearing of the petition in two newspapers, viz., Business Standard English Daily and Andhra Bhoomi Telugu Daily, Hyderabad editions on 22.07.2014. As per the directions of this Court, dated 18.06.2014, the Regional Director made a combined report dated 25.08.2014 on the affairs of the Resulting Company and Demerged Company and the same was filed before this Court on 30.07.2014.

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Heard the learned counsel for the Demerged Company, who submits that all the requirements were complied with and nobody raised objections. He further submits that the Regional Director filed a report stating that notice was issued to Income Tax Department, vide circular No.1/2014 dated 15.01.2014, for submitting their comments/ objections. It is also stated in the report that this Court may direct the Demerged Company to submit no objection certificate from the secured creditors before sanctioning the Scheme of Arrangement. It is also stated in the report that this Court may direct the Companies to comply with the applicable provisions of the Companies Act for change of name of Demerged Company from Hyderabad Chemicals Limited to Vibrant Greentech Limited and for change of name of Resulting Company from Vibrant Greentech Limited to Hyderabad Chemicals. The learned counsel for the petitioner submitted that the change of name will be carried out as approved by the Registrar of Companies as per the provisions of the Act. It is also stated in the report that both the Companies, involved in the Scheme of Arrangement, are regular in filing the statutory returns and no investigations are pending against both the companies. The learned counsel for the petitioners stated that both the

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Companies will comply with the objections raised by the Regional Director and subject to the same the Scheme may be sanctioned.

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In view of the same, this Court is of the opinion that there are no legally sustainable objections to decline sanction of the proposed scheme of demerger between both the companies.

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The proposed scheme of demerger is, accordingly, sanctioned subject to the following conditions:

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1. The petitioners shall strictly follow the Accounting Standards and credit the difference of amount to the capital reserve head as pointed out in Para-8 of the report, dated 25.08.2014;

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2. The petitioners shall execute the agreement bonds for repaying the liability of sales tax deferment to the Commercial Tax Department as per the decision taken by the State Level Committee on 14.08.2014, which was conveyed to the petitioners, vide letter dated 01.09.2014;

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3. The petitioners shall communicate a copy of this order to the Registrar of Companies within 30 days from the date of receipt of this order;

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4. The petitioners shall also pay an amount of Rs.4,000/- as fee for the counsel for the Central Government.

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Accordingly, both the Company Petitions are allowed. As a sequel thereto, miscellaneous applications, if any pending in these petitions, shall stand closed.

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A. RAJASHEKER REDDY, J

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Date: 28-10-2014

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siva

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HON’BLE SRI JUSTICE A.RAJASHEKER REDDY

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COMPANY PETITION Nos.122 and 123 of 2014

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Date : 28-10-2014

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siva

Hyderabad Chemicals Umited (Hcl) v. -

Case brief

What is this about?

What did the court decide?

Hyderabad Chemicals Umited (Hcl) v. -

Case brief

What is this about?

What did the court decide?

What the court decided

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